The Internet A Dealers Perspective

Author: Peter Alan Brandow

Rest assured, pigs cannot fly. Nonetheless, many folks look skyward if you suggest a sighting.

About six months ago the automotive frontier changed from “bull run” to “ho hum.” At the same time, those in the know predicted 2001 to finish out in the mid to high 16 million mark putting us on pace with the top three volume years the industry has ever seen. So, why is the e-engine that dominated our vision of the past two years now on the back burner and why does it feel as if it’s all grinding to a halt?

Something has changed. The once sacred ground of the World Wide Web now appears burnt and barren. Many dealers are sighing the sigh of relief as they contemplate an “I told you so.” At the same time, many manufacturers are cautiously holding back on their Internet initiatives to determine if it ’s worth their effort, yet.

I am amazed at the number of folks that continue to be angered, confused and plain old fashioned vexed by the Internet and Cyber selling. What amazes me is that smart folks in our industry are thrilled, delighted and intrigued by any new fangled toy that lights up, beeps, or runs on batteries. Why is the latest wristwatch with cell phone, calendar and heart monitor a “must have,” while an electronic customer magnet that requires typing three W’s a “devil machine”?

Well, it’s only a guess, but I believe that lower consumer confidence is driven by the fall of the DotComs. Why then has more of the hit seemed to have landed on the jaw of the domestic Big Three? My guess is that their lack of stand up leadership became more apparent in their inability to deliver the digital solutions they promised. Import products have long been viewed as “hip” and “reliable.” We’ve just assumed that those in charge of building those products also possessed those attributes. After all, it just makes sense that it would take cool, take charge leaders to make cool, cutting edge cars and trucks. On the contrary, it must take stodgy; stand offish, me-first guys to build boring, unreliable products. They probably charge too much as well. No wonder the financial and buying public that were so attentive to the possibility of real change in our domestic producers are walking away disappointed.

The Internet selling systems that those guys promised were the icon of something new at those factories; the Internet signaled change in the Big Three. Unfortunately, rather than embrace the consumer with the Internet, the Big Three seem to wrap their cyber strategies in dealer and self centric policy, rather than cutting edge CRM. They missed the point and hesitated when Wall Street burped. The result is that the credibility of their commitment to change was flushed with the stock values of the DotComs; in that way, the domestic three have combined to damn up the river of prosperity that flowed through them for the past two years. And the imports just get stronger.

Ok, so what if you’re right, Pete, what should I do about it?

I’m glad you asked. First of all recognize that volume in the North American marketplace is, for the most part, driven by need and directed by ego. Brands that are favored with volume focus those in need on a value package that satisfies buyer’s ego. If it were any different, everyone would purchase the lowest priced vehicles in their segment. Kia and Hyundai wouldn ’t be scrounging for a few hundred thousand sales; they’d be pushing to buy North American plants. Entry level Chevy’s and Fords would be the rage, and cars would outsell trucks everywhere. Lexus and Honda would be worried and Saturn would be king. As for Sport Utes, you wouldn’t be able to give them away other than to a handful of cowboys and campers. Let’s not forget that fewer than 10% of the 4X4s in this country ever, and I mean ever in their life, go off road. But, the 4X4’s do cost more to build, much more to fuel and a ton more to buy. So, the value equation is not about serving up “cheap”, it’s about satisfying one’s ego, at a comfortable price.

What does this have to do with the Internet?

Everything! The Web is all about ego and immediate gratification. Sure the Internet is information rich and push button easy, but test after test has shown that the prices on the Net are not scooped up from the bargain basement. In fact, Internet buyers tend to be those who are willing to pay at a bit more for the convenience of it all. Think of them as the mini-mart and boutique shopping set. They want their shoes from Neiman and their burgers from the Four Seasons. They buy snacks from the mini-mart, coffee from StarBucks and grab cash from the ATM. Sure, they’ll respond to a good deal, and they are smart enough to know one when they see one, but, they are not likely to swap the promise of a good deal for the gauntlet of a showroom fist fight. If nothing else, these buyers are educated, wealthy and on the move.

The Internet is where that customer goes to get quick solutions to information intensive questions. More and more, it’s where car buyers would prefer to make their final decision.

Developing more business in the digital age is about listening and sharing &, oh yeah, a fast modem helps too. In Business Development (code for incremental sales and higher closing ratios), the Internet is the tool of choice.

The digital frontier isn’t dead, because at its epicenter is still the most powerful new tool in the automotive retail wars. The Web was born of the need for a busy and mobile society to share relevant information both individually and as a community. The thirst for that information is what drove digital technology by which packets of information are broadcast from one computer to a population of others who want to view, to contribute to and to selectively forward that growing body of interactive records.

The concept is more about sharing relevant data “real-time” than about the technology of the digital age. The idea has always been about hearing what the community wants, gathering it and then providing it on their time schedule. The exciting part is how it expands the numbers. American automotive retailers have always lived on the 25 to 30 percent of the walk-in shoppers that could be charmed or pressured into buying. Seven out of 10 folks fell through the holes in that retail net. The World Wide Web serves to expand the size our “net” to gather those within the 7 out of 10 that shake free.

Through the Internet, vast amounts of information can be culled through a filter that is defined by a single buyer. The result is a decision tree stripped of clutter and useless or undesirable product information. In the final step a buyer pares away the last runners up through a side-by-side comparison until, with the click of a button, the selection is made and order placed. In this world there is no “Bobby’s Motors” versus “Gary’s Auto Sales.” There is no “Franky World’s Greatest Car Sale.” There are only the hard facts about a particular Ford vs. a Toyota, a Chrysler vs. a Chevy; and the winner will likely possess a dealer body with efficient cyber call centers staffed by trained and cheerful operators who are authorized to make the right decisions the moment a buyer presents herself.

It’s not just throughput, but closing ratio that drives market share.

The art of improving both the total number of those who would consider your product as well as the ratio of shoppers to buyers is called “business development”. Business development is the newest code word for increased closing ratios. The theory behind business development is simply that increased closing ratios are about better communication with the buying public. Those who view the digital age as the age of information technology are among those who “get it.” The Web enables improved data research and greater consumer connectivity. Web technology is not the focus, communication is. And we all know that the heart of communication is listening, gathering and sharing. So what will the best and the brightest do to build market share in the new millennium?

Listening and Sharing in the New Age.

A friend called this week to ask me a question about what a great deal might be on a new car that he knew I did not handle. I sell Chryslers, Chevy’s, and Kias, he wanted a Jaguar. Waste of time? Imposition? Rude call? Not on your life.

Most of the shoppers that call on my dealership are really uncertain whether they want my product; many are only looking to eliminate what I sell from their long list. Many others are simply too scared to make any decision at all. Take heart. These calls are big opportunities.

Historically, I might have forwarded such a caller onto a friend in the business of selling Jags. The hope would have been that the Jag dealer would, in turn, send me the leads that were appropriate to my franchises. Who knows, maybe the lead I sent would be so happy with the referral that he too might send friends and neighbors to me out of gratitude. Mostly, however, I used to be happy just to end the call before I ate up time as the free library of information on products on which I wasn’t likely to make a profit.

But, with the ease of the cyber tools available on the Net, I now go a little further with a few clicks of a mouse. The Web provides me a tool that empowers me to go further for my callers with accurate, relevant, persuasive information. I tell them about Autobytel, I explain Kelly Blue book and I talk them through GiGo, Lease Link and Chrome Data. Finally I offer to shop the thing and e-mail them a few facts and figures that might make the buying experience very easy and satisfying. During the whole process I am available 24/7 through NetSearch and, of course, I never give up on the possibility of selling a Chrysler, Chevy, Kia or perhaps even a used (near new) Jag. In short, the new age, information rich, customer politics empower me to be of such high service that what might have been an hour of waiting for the next live up has turned an iffy phone lead into a prospect and a 0% chance of making money into a profit center.

Teaching Old Dogs New Tricks. I can only assume that 2001 buyers are going to be strongly influenced by a declining economy and the tighter financial resources in the hands of average Americans. Value driven purchases will largely favor those brands that are believed to have lower operational cost, longer life or such an advantaged residual value that their monthly payment is greatly reduced. Beyond all that, people will be down right scared and those with caring, customer focused sales teams are likely to make customers for life from a few extra steps along the way.

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